1. The rise of middle class
Satya MAHESH, India
17th April 2012, London
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4. but ,the Speed of Change is not…
5 Million Years 250 Years
5 Mio years ago the first modern humans appeared / 500,000 years ago - Homo sapiens / 50,000
years ago agriculture started / 5,000 years ago moved into towns and cities./ 500 years ago :
Industrial revolution or mass production (Printing Press) – 30 years ago Information Age
Each era lasted for one tenth of previous era !!!
5. Future - not a linear
extrapolation of the past
Trends may
show the path
Image from FMSI web site (Financial Management solutions Inc)
6. Increase of population
Increase of population
under democracies
under democracies
More hands to earn..
fewer mouths to feed
Money begets money
Vicious to Virtuous
13. Individually poor – Collectively middle class
Individually middle class – Collectively Rich
Gapminder
14. Exercises more consumer
rights than civil rights
Pay cheque to pay cheque
Education, family house,
Manager or Professional
White collar Job
Who are middle class ?
15. Ask ten economists , get eleven answers
Absolute Relative
Earning Consumption
Individual Household
Define the purpose
16. Per Capita earning of $2 - $ 13 / Day Ravallion
Earning
Per capita earning of $10 - $ 20 / Day World Bank
Per capita earning of $16 - $80 / Day Goldman sachs
includes those earning more than $10 a day, but excludes those in
the top 5 percent of the income distribution Birdsall (2010)
$2 and $10 per person per day consumption Banerjee and Duflo (2007)
Consumption
1/3 of income left for discretionary spendingn Dilip K. Das
Income interval from 75% to 125% of the median Thurow (1987)
$5K - $15K Disposable Income/ Yr Euromonitor
who could routinely buy items sold at a typical Western-type discount
store Miller-McCune ( 2008)
17. Is this the BRICs Decade ? Gold man Sachs Publication May ,2010
18. Poor Middle Class Rich
Money To be used To be managed To be invested
Food Quantity Quality Presentation
Time Present Future Traditions and History
Imp for making
Education Valued and Revered Crucial connections
Driving Survival, Relationships Work & Financial , Political &
Forces & Entertainment Achievement Social connections
Ruby Payne, A Framework for Understanding Poverty, Highlands, TX: aha! Process, Inc.,1996 pp. 42 - 43
19. Leapfrog the paths
Can differentiate cheap..
Economical and premium
Guarded…Saving
Modern yet ,traditional
20. !ndia
Shifting brahminical restraint
3Cs: Cable TV ,Cinema & Cricket
More mobiles than toilets
(not just mobile..FM,Calc,time)
Middle Class Car Tata Nano?
Time Cover Photo by Arthur Hochstein. Woman by hill street studios-getty images blend collection
21. Global Middle Class
MC Population in Mios 2009 2020 2030 2009 2020 2030
Middle class
Asia Pacific 525 1,740 3,228 28% 54% 66%
Population
Europe 664 703 680 36% 22% 14%
North America 338 333 322 18% 10% 7%
Central and South America 181 251 313 10% 8% 6%
Middle east and North Africa 105 165 234 6% 5% 5%
Sub -Saharan Africa 32 57 107 2% 2% 2%
World 1,845 3,249 4,884 100% 100% 100%
Mio of 2005 PPP $ 2009 2020 2030 2009 2020 2030
Middle class
Asia Pacific 4,952 14,798 32,596 23% 42% 59%
Spending
Europe 8,138 10,301 11,337 38% 29% 20%
North America 5,602 5,863 5,837 26% 17% 10%
Central and South America 1,534 2,315 3,117 7% 7% 6%
Middle east and North Africa 796 1,321 1,966 4% 4% 4%
Sub -Saharan Africa 256 448 827 1% 1% 1%
World 21,278 35,046 55,680 100% 100% 100%
22. Future : Wave of Consumption
The emerging middle class in developing countries : Homi Kharas
30. What organizations can do?
Play across tiers and SE Strata
Interdependent
High Quality – Low Cost Socially sustainable
Business models
Ideal Admixture
Many small Vs few Big brands Share
Opportunities
Volumes will bring Values , costs and profits
32. Individual and references & Image Credits
My Wife, Syamala and
My collegues M/S Amlesh Ranjan , Venkatesan Subramanian
and Parthasarathy
Marcus evans and Sponsors Bio Portfolio
Gapminder
Photographs from various unknown artists, CIA Fact book
Profitable growth strategies for the Global Emerging Middle
by PWC
The emerging middle class in developing countries : Homi
Kharas
2012 Edelman trust barometer
Many more references books , articles from Google search